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Presented below are transactions related to Sandhill Company
Presented below are transactions related to Sandhill Company.
1.On December 3, Sandhill Company sold $593,100 of merchandise on account to Indigo Co., terms 2/10, n/30, FOB destination. Sandhill paid $350 for freight charges. The cost of the merchandise sold was $386,700.2.On December 8, Indigo Co. was granted an allowance of $28,400 for merchandise purchased on December 3.3.On December 13, Sandhill Company received the balance due from Indigo Co.
(a)
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Prepare the journal entries to record these transactions on the books of Sandhill Company using a perpetual inventory system. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
No.
Date
Account Titles and Explanation
Debit
Credit
1.
Dec. 3
Dec. 8
Dec. 13
Jan. 2
(To record credit sale)
Dec. 3
Dec. 8
Dec. 13
Jan. 2
(To record cost of merchandise sold)
Dec. 3
Dec. 8
Dec. 13
Jan. 2
(To record freight charges)2.
Dec. 3
Dec. 8
Dec. 13
Jan. 2
3.
Dec. 3
Dec. 8
Dec. 13
Jan. 2
Expert Solution
| Journal Entries: | |||
| Date | Account Titles and Explanation | Debit | Credit |
| Dec. 3 | Accounts Receivables | $593,100 | |
| Sales Revenue | $593,100 | ||
| (To record credit sales) | |||
| Dec. 3 | Cost of Goods Sold | $386,700 | |
| Inventory | $386,700 | ||
| (To record the cost of merchandise sold) | |||
| Dec. 3 | Fright-Out | $350 | |
| Cash | $350 | ||
| (To record freight charges) | |||
| Dec. 8 | Sales Return and Allowances | $28,400 | |
| Account Receivables | $28,400 | ||
| (To record sales return and allowances) | |||
| Dec. 13 | Cash | $553,406 | |
| Sales Discount ($564,700*2%) | 11294 | ||
| Account Receivables ($593,100-$28,400) | $564,700 | ||
| (To record cash received and discount allowed) | |||
| Jan. 2 | Cash | $564,700 | |
| Accounts Receivables | $564,700 | ||
| (To record credit sales) | |||
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